ECONOMICS ONE LINER MCQS
Economics is the study of how societies allocate limited resources to meet human needs. These Economics One Liner MCQs are designed for quick and effective learning of key principles such as demand, supply, production, inflation, and GDP. Moreover, these short questions are perfect for CSS, PMS, PPSC, and university-level tests. Regular practice helps students recall definitions, concepts, and economic laws faster. In addition, these MCQs build a solid foundation for understanding both micro and macroeconomics. Finally, learners can use these questions for daily revision and exam preparation to strengthen analytical and decision-making skills.
Basic Economics One Liner MCQs
Short Paragraph:
ECONOMICS ONE LINER MCQS studies how individuals, businesses, and governments allocate limited resources to satisfy unlimited wants. It deals with production, distribution, and consumption of goods and services. Economics helps understand issues like inflation, unemployment, and growth.
What is the study of production and consumption called?
Answer: EconomicsWho is known as the Father of Economics?
Answer: Adam SmithThe central problem of economics is:
Answer: ScarcityThe total value of goods and services produced in a country is:
Answer: Gross Domestic Product (GDP)The price of a product is determined by:
Answer: Supply and demandA person who organizes and manages a business is called:
Answer: EntrepreneurThe excess of income over expenditure is:
Answer: ProfitA market with only one seller is called:
Answer: MonopolyThe opposite of inflation is:
Answer: DeflationWhich of the following is a factor of production?
Answer: LaborEconomics is divided into how many main branches?
Answer: Two — Microeconomics and MacroeconomicsThe study of individual economic units is called:
Answer: MicroeconomicsThe study of the economy as a whole is called:
Answer: MacroeconomicsThe government’s financial statement is known as:
Answer: BudgetWhen demand exceeds supply, prices:
Answer: RiseWhen supply exceeds demand, prices:
Answer: FallGoods used to produce other goods are called:
Answer: Capital goodsWhat does GDP measure?
Answer: Economic performance of a countryMoney used to start or run a business is called:
Answer: CapitalThe term “invisible hand” was introduced by:
Answer: Adam Smith
Short Paragraph:
ECONOMICS ONE LINER MCQS studies production, consumption, and distribution of resources. It helps understand choices, efficiency, markets, and policies affecting individuals and society.
The study of how prices are determined in a market is:
Answer: Microeconomics
Explanation: Microeconomics analyzes individual markets and behavior of consumers and firms.The study of overall economic performance is:
Answer: Macroeconomics
Explanation: Macroeconomics looks at GDP, inflation, unemployment, and fiscal policy.Scarcity means:
Answer: Limited resources for unlimited wants
Explanation: Scarcity forces individuals and societies to make choices.Opportunity cost refers to:
Answer: Next best alternative forgone
Explanation: Every choice has a trade-off.The demand curve slopes downward because:
Answer: Higher price reduces quantity demanded
Explanation: Law of demand: price and quantity demanded are inversely related.Supply curve slopes upward because:
Answer: Higher price increases quantity supplied
Explanation: Law of supply: producers supply more at higher prices.Monopoly market is characterized by:
Answer: Single seller
Explanation: One firm controls the market and price.Oligopoly means:
Answer: Few sellers
Explanation: Small number of firms dominate market competition.Perfect competition has:
Answer: Many buyers and sellers
Explanation: No single firm controls price; products are homogeneous.Inflation leads to:
Answer: Increase in general prices
Explanation: Rising prices reduce purchasing power.Deflation means:
Answer: Decline in general prices
Explanation: Opposite of inflation; may slow economic growth.Gross Domestic Product (GDP) measures:
Answer: Total economic output of a country
Explanation: GDP is sum of goods/services produced in a year.Fiscal policy is controlled by:
Answer: Government
Explanation: Government uses taxation and spending to influence economy.Monetary policy is controlled by:
Answer: Central bank
Explanation: Central banks regulate money supply and interest rates.Capital goods are:
Answer: Goods used to produce other goods
Explanation: Machines, tools, and equipment are capital goods.Human capital refers to:
Answer: Skills and knowledge of workers
Explanation: Education and training enhance productivity.Barter system involves:
Answer: Exchange of goods without money
Explanation: Before money, goods/services were directly traded.Price elasticity of demand measures:
Answer: Sensitivity of quantity demanded to price change
Explanation: High elasticity means consumers respond strongly to price changes.A progressive tax system:
Answer: Higher income, higher tax rate
Explanation: Taxes increase with income to reduce inequality.Unemployment occurs when:
Answer: People willing to work cannot find jobs
Explanation: Unemployment reduces income and affects economic growth.
Short Paragraph:
ECONOMICS ONE LINER MCQS is the study of production, consumption, and distribution of goods and services. It analyzes choices, markets, efficiency, and factors affecting individuals and society.
- Scarcity refers to:
Answer: Limited resources for unlimited wants
Explanation: Scarcity forces individuals and societies to make choices. - Opportunity cost is:
Answer: The next best alternative forgone
Explanation: Every choice involves a trade-off. - The law of demand states:
Answer: Higher price reduces quantity demanded
Explanation: Price and quantity demanded are inversely related. - The law of supply states:
Answer: Higher price increases quantity supplied
Explanation: Suppliers produce more at higher prices. - Gross Domestic Product (GDP) measures:
Answer: Total economic output of a country
Explanation: GDP is the sum of goods and services produced annually. - Inflation leads to:
Answer: Increase in general prices
Explanation: Rising prices reduce purchasing power. - Deflation means:
Answer: Decline in general prices
Explanation: Opposite of inflation; may slow economic growth. - Perfect competition is characterized by:
Answer: Many buyers and sellers
Explanation: No single firm controls price; products are homogeneous. - Monopoly is characterized by:
Answer: Single seller
Explanation: One firm dominates the market and controls price. - Oligopoly is characterized by:
Answer: Few sellers
Explanation: Small number of firms dominate market competition. - Capital goods are:
Answer: Goods used to produce other goods
Explanation: Machines, tools, and equipment are examples. - Human capital refers to:
Answer: Skills and knowledge of workers
Explanation: Education and training enhance productivity. - Progressive tax system means:
Answer: Higher income, higher tax rate
Explanation: Taxes increase with income to reduce inequality. - Unemployment occurs when:
Answer: People willing to work cannot find jobs
Explanation: Reduces income and affects economic growth. - Barter system is:
Answer: Exchange of goods without money
Explanation: Goods and services were traded directly before money. - Price elasticity of demand measures:
Answer: Sensitivity of quantity demanded to price change
Explanation: High elasticity means strong response to price changes. - Fiscal policy is controlled by:
Answer: Government
Explanation: Uses taxation and spending to influence the economy. - Monetary policy is controlled by:
Answer: Central bank
Explanation: Regulates money supply and interest rates. - The main source of renewable energy is:
Answer: Solar energy
Explanation: Solar energy is naturally replenished by sunlight. - Overfishing leads to:
Answer: Decreased fish populations
Explanation: Unsustainable fishing disrupts aquatic ecosystems.
Short Paragraph:
These Economics one liner mcqs studies how individuals and societies allocate scarce resources, make decisions, and analyze markets, production, and consumption.
- Goods used for further production are:
Answer: Capital goods
Explanation: Used to produce other goods. - Utility means:
Answer: Satisfaction from consumption
Explanation: More utility = more usefulness. - The market with only one seller is:
Answer: Monopoly
Explanation: The firm controls price and supply. - Demand increases when:
Answer: Price decreases
Explanation: Inverse relationship between price and demand. - The tool used by central banks is:
Answer: Monetary policy
Explanation: Controls money supply and interest rates. - GDP includes:
Answer: Total value of goods and services
Explanation: Measures national output. - A tax that increases with income is:
Answer: Progressive tax
Explanation: Higher earners pay higher rates. - Importing more than exporting leads to:
Answer: Trade deficit
Explanation: Imports exceed exports. - Money performs the function of:
Answer: Medium of exchange
Explanation: Facilitates transactions. - Inflation reduces:
Answer: Purchasing power
Explanation: Prices rise faster than income. - A market with many buyers and sellers is:
Answer: Perfect competition
Explanation: No single firm controls price. - Opportunity cost refers to:
Answer: Next best alternative
Explanation: Making a choice means giving something up. - The reward for land is:
Answer: Rent
Explanation: Payment made for using land resources. - Firms aim for:
Answer: Profit maximization
Explanation: Core objective in economics. - Exports bring:
Answer: Foreign exchange
Explanation: Earn money from other countries. - When supply increases:
Answer: Price falls
Explanation: Excess supply lowers price. - Human capital includes:
Answer: Skills and education
Explanation: Increases productivity. - Barter system is based on:
Answer: Exchange of goods
Explanation: No money involved. - The value of currency compared to another is:
Answer: Exchange rate
Explanation: Determines import/export prices. - Saving means:
Answer: Income not spent
Explanation: Helps in investment and growth.
Short Paragraph:
Economics One liner mcqs analyzes how scarce resources are used to produce goods, distribute income, and satisfy human wants.
- The study of individual economic units is:
Answer: Microeconomics
Explanation: Deals with households and firms. - The study of whole economy is:
Answer: Macroeconomics
Explanation: Covers GDP, inflation, unemployment. - Which is a free good?
Answer: Air
Explanation: Available without cost (in normal conditions). - Producers want to:
Answer: Maximize profit
Explanation: Main objective in business. - Currency notes are issued by:
Answer: Central bank
Explanation: Controls money supply. - When demand > supply, price:
Answer: Rises
Explanation: Shortage causes price increase. - Commodity with close substitutes is:
Answer: Elastic demand
Explanation: People switch easily. - Which cost does NOT vary with output?
Answer: Fixed cost
Explanation: Remains constant. - National income increases due to:
Answer: Higher production
Explanation: More goods = more income. - Tax on imported goods is:
Answer: Tariff
Explanation: Raises price of foreign goods. - Which is a direct tax?
Answer: Income tax
Explanation: Paid directly by individuals. - Which sector produces raw materials?
Answer: Primary sector
Explanation: Includes agriculture, mining. - An economic system controlled by government is:
Answer: Planned economy
Explanation: Government decides production. - When price falls, supply:
Answer: Decreases
Explanation: Producers earn less profit. - GDP stands for:
Answer: Gross Domestic Product
Explanation: Measures national output. - Money stored for future use is:
Answer: Saving
Explanation: Income not spent. - Hiring workers increases:
Answer: Labor supply
Explanation: More workers = more labor. - Central banks control:
Answer: Interest rates
Explanation: Used to regulate economy. - A firm that dominates market price is:
Answer: Monopoly
Explanation: Single seller controls supply. - Trade between countries is called:
Answer: International trade
Explanation: Exchange of goods globally.
Short Paragraph:
ECONOMICS ONE LINER MCQS studies production, distribution, consumption of goods and services, and decision-making with limited resources.
- The basic economic problem is:
Answer: Scarcity
Explanation: Resources are limited, wants unlimited. - The study of individual economic units is:
Answer: Microeconomics
Explanation: Focuses on households and firms. - Demand decreases when price:
Answer: Increases
Explanation: Inverse relationship. - Money that banks keep as reserve is:
Answer: Cash reserve
Explanation: It ensures stability and liquidity. - GDP stands for:
Answer: Gross Domestic Product
Explanation: Total value of goods and services produced. - The curve showing price and quantity demanded is:
Answer: Demand curve
Explanation: Slopes downward. - Which market has only one seller?
Answer: Monopoly
Explanation: Single firm controls supply. - A tax added to imports is:
Answer: Tariff
Explanation: Governments use it to protect local industries. - Opportunity cost means:
Answer: Next best alternative
Explanation: Cost of foregone choice. - Inflation is a rise in:
Answer: General price level
Explanation: Reduces purchasing power. - Which organization controls world trade?
Answer: WTO
Explanation: Manages global trade rules. - Profit is equal to:
Answer: Revenue – Cost
Explanation: Basic formula for business earnings. - Demand for essential goods is:
Answer: Inelastic
Explanation: Quantity doesn’t change much with price. - Which factor of production earns rent?
Answer: Land
Explanation: Landowners receive rent. - A period of low economic activity is:
Answer: Recession
Explanation: Fall in GDP and employment. - Exports mean goods sent:
Answer: To other countries
Explanation: Earn foreign exchange. - A budget deficit occurs when:
Answer: Expenses > Revenue
Explanation: Government spends more than it earns. - Central banks control:
Answer: Monetary policy
Explanation: They manage interest rates and money supply. - Free market economy is controlled by:
Answer: Supply and demand
Explanation: Minimal government role. - The largest component of GDP is:
Answer: Consumption
Explanation: Household spending is highest.
Short Paragraph:
ECONOMICS ONE LINER MCQS studies scarcity, markets, pricing, production, decision-making, and how societies allocate limited resources.
- What is the reward for labor?
Answer: Wages
Explanation: Payment for human effort. - A market with many sellers and many buyers is:
Answer: Perfect competition
Explanation: No single seller controls price. - Unemployment increases during:
Answer: Recession
Explanation: Economic slowdown reduces jobs. - Which term describes total money supply?
Answer: Liquidity
Explanation: All cash and easily convertible assets. - A tax charged on goods and services is:
Answer: Sales tax
Explanation: Paid by consumers at purchase. - Which curve shows cost per additional unit?
Answer: Marginal cost curve
Explanation: Shows cost of producing one more unit. - The bank that issues currency in a country is:
Answer: Central Bank
Explanation: Controls monetary policy. - Surplus occurs when:
Answer: Supply > Demand
Explanation: Excess quantity left unsold. - Money used to buy assets expecting profit is:
Answer: Investment
Explanation: Increases wealth over time. - Which factor of production earns profit?
Answer: Entrepreneur
Explanation: Takes risks to run business. - When price falls, supply generally:
Answer: Decreases
Explanation: Suppliers produce less at low prices. - Exports increase a country’s:
Answer: Foreign exchange
Explanation: Earns currency from trade. - Inflation control is the job of:
Answer: Monetary policy
Explanation: Adjusts money supply and interest rates. - The study of total national output is:
Answer: Macroeconomics
Explanation: Focuses on overall economy. - Goods used to produce other goods are:
Answer: Capital goods
Explanation: Machines, tools, equipment. - The rise in cost of production increases:
Answer: Cost-push inflation
Explanation: Higher production cost → higher prices. - A country’s total wealth is called:
Answer: National income
Explanation: Sum of all earnings. - When demand exceeds supply, prices:
Answer: Increase
Explanation: Creates scarcity. - A government-owned business is called:
Answer: Public sector
Explanation: Operated by the state. - VAT stands for:
Answer: Value Added Tax
Explanation: Tax applied at each stage of production.
Short Paragraph:
ECONOMICS ONE LINER MCQS focuses on production, markets, money, pricing, consumer behavior, and how countries manage limited resources.
- Utility in economics means:
Answer: Satisfaction from consumption
Explanation: Measures consumer happiness. - Increase in income causes demand to:
Answer: Increase
Explanation: People buy more when income rises. - A rise in general price level over time is:
Answer: Inflation
Explanation: Reduces purchasing power. - The market with many sellers but differentiated products is:
Answer: Monopolistic competition
Explanation: Each seller offers unique goods. - The cost of giving up the next best option is:
Answer: Opportunity cost
Explanation: Fundamental economic concept. - Who prepares the annual federal budget?
Answer: Government
Explanation: Allocates spending and revenue. - A country importing more than exporting faces:
Answer: Trade deficit
Explanation: Outflow of foreign exchange. - The factor of production that organizes others is:
Answer: Entrepreneur
Explanation: Takes risks and makes decisions. - Which bank lends to poor individuals?
Answer: Microfinance bank
Explanation: Provides small loans. - When supply decreases, prices:
Answer: Rise
Explanation: Low supply → higher price. - Currency notes are issued by:
Answer: Central bank
Explanation: Manages money supply. - The unemployment caused by business cycles is:
Answer: Cyclical unemployment
Explanation: Happens during recessions. - GDP per capita measures:
Answer: Income per person
Explanation: Shows living standard. - Goods that customers buy frequently are:
Answer: Consumer goods
Explanation: Include everyday items. - When interest rate rises, borrowing:
Answer: Falls
Explanation: Loans become expensive. - Tax on property is called:
Answer: Property tax
Explanation: Charged on land or buildings. - An economy with government + private sector is:
Answer: Mixed economy
Explanation: Combination of both systems. - Subsidy means:
Answer: Government financial support
Explanation: Makes goods cheaper for public. - Investment in roads and bridges is:
Answer: Infrastructure spending
Explanation: Improves economic growth. - Demand curve generally slopes:
Answer: Downward
Explanation: Higher price → lower quantity demanded.
💰 Short Paragraph:
ECONOMICS ONE LINER MCQS studies how individuals, businesses, and governments allocate scarce resources to meet unlimited wants.
- The central problem of economics is:
Answer: Scarcity
Explanation: Resources are limited, but wants are unlimited. - The demand curve generally:
Answer: Slopes downward
Explanation: Lower price → higher quantity demanded. - Goods used to produce other goods are:
Answer: Capital goods
Explanation: They help in production, like machinery. - GDP stands for:
Answer: Gross Domestic Product
Explanation: It measures total output within a country. - Which market has a single seller?
Answer: Monopoly
Explanation: Monopoly gives full control over price. - Opportunity cost means:
Answer: Next best alternative forgone
Explanation: Choosing one option sacrifices another. - Inflation refers to:
Answer: Rise in general price level
Explanation: Inflation reduces purchasing power. - The factor of production that earns wages is:
Answer: Labor
Explanation: Workers provide human effort. - Market equilibrium is when:
Answer: Demand equals supply
Explanation: Price stabilizes at this point. - Microeconomics focuses on:
Answer: Individual units
Explanation: It studies firms, consumers, markets. - Depreciation means:
Answer: Decrease in asset value
Explanation: Due to wear and tear over time. - A good with direct consumption is:
Answer: Consumer good
Explanation: These are used for personal satisfaction. - Which policy controls inflation?
Answer: Monetary policy
Explanation: Central banks adjust interest rates. - A tax that increases with income is:
Answer: Progressive tax
Explanation: High earners pay higher rates. - Recession means:
Answer: Fall in economic activity
Explanation: Characterized by reduced GDP. - Trade between countries is called:
Answer: International trade
Explanation: It involves import and export. - Budget deficit occurs when:
Answer: Expenditure > revenue
Explanation: Government spends more than it earns. - PPP stands for:
Answer: Purchasing Power Parity
Explanation: It compares currency value across countries. - Elastic demand means:
Answer: Quantity changes greatly with price
Explanation: Consumers respond strongly to price changes.
💰 Short Paragraph:
ECONOMICS ONE LINER MCQS focuses on production, distribution, and consumption of goods and services, explaining how economies function and grow.
- The price at which quantity supplied equals quantity demanded is:
Answer: Equilibrium price
Explanation: Market clears at this price. - Elasticity of demand measures:
Answer: Responsiveness to price change
Explanation: Shows how demand changes when price changes. - In economics, land refers to:
Answer: Natural resources
Explanation: Includes soil, minerals, water. - Which cost changes with output?
Answer: Variable cost
Explanation: It varies as production increases or decreases. - A market with many buyers and sellers is:
Answer: Perfect competition
Explanation: No single seller controls price. - GNP stands for:
Answer: Gross National Product
Explanation: Measures income earned by citizens anywhere. - A fall in price leads to:
Answer: Increase in demand
Explanation: According to the law of demand. - Surplus occurs when:
Answer: Supply > demand
Explanation: Producers cannot sell all goods at that price. - Which policy deals with government spending?
Answer: Fiscal policy
Explanation: Uses taxes and expenditure. - Goods that are used together are:
Answer: Complementary goods
Explanation: Example: car and petrol. - Inflation reduces:
Answer: Purchasing power
Explanation: Money buys fewer goods. - Marginal cost is the cost of producing:
Answer: One additional unit
Explanation: It helps firms decide optimal production. - A firm that is price taker exists in:
Answer: Perfect competition
Explanation: Firms accept market price. - Which market form has few sellers?
Answer: Oligopoly
Explanation: Example: telecom companies. - GDP increases when:
Answer: Output rises
Explanation: Higher production boosts GDP. - Unemployment means:
Answer: People willing to work but unable to find jobs
Explanation: They are part of the labor force. - The term “national income” measures:
Answer: Total income of a country
Explanation: Includes wages, rent, profit, interest. - Demand for basic necessities is:
Answer: Inelastic
Explanation: Demand doesn’t change much with price. - A country’s total exports minus imports is:
Answer: Trade balance
Explanation: Shows surplus or deficit.
💰 Short Paragraph:
ECONOMICS ONE LINER MCQS analyzes production, scarcity, pricing, consumption, and how resources are allocated in markets and governments.
- Which factor of production earns profit?
Answer: Entrepreneurship
Explanation: Entrepreneurs take risks and earn returns. - Demand increases when:
Answer: Consumer income rises
Explanation: Higher income → more purchasing. - Which market has many sellers but differentiated products?
Answer: Monopolistic competition
Explanation: Firms sell similar but not identical goods. - Giffen goods show:
Answer: Demand rises with price
Explanation: Poor households consume more when price rises. - Inflation above 50% per month is:
Answer: Hyperinflation
Explanation: Prices grow extremely fast. - Which curve shows combinations of two goods?
Answer: Production possibility curve
Explanation: PPC shows trade-offs. - Indirect taxes include:
Answer: Sales tax
Explanation: Paid on goods and services. - Which policy lowers spending to control inflation?
Answer: Contractionary policy
Explanation: Reduces money supply. - A situation of persistent unemployment is called:
Answer: Structural unemployment
Explanation: Caused by mismatch of skills. - When price is below equilibrium, there is:
Answer: Shortage
Explanation: Demand exceeds supply. - GDP excludes:
Answer: Illegal activities
Explanation: Only legal, recorded production counts. - Substitution effect occurs when:
Answer: People switch to cheaper alternatives
Explanation: Consumers avoid expensive goods. - Fiscal deficit occurs when:
Answer: Expenditure > revenue
Explanation: Government overspends. - Money used to store value is called:
Answer: Store of value function
Explanation: Money retains worth. - Elastic supply means:
Answer: Supply changes greatly with price
Explanation: Producers respond quickly. - Imports reduce:
Answer: Net exports
Explanation: More imports lower trade balance. - The value of currency compared to others is:
Answer: Exchange rate
Explanation: It determines international value. - Which market structure advertises heavily?
Answer: Oligopoly
Explanation: Firms compete via branding. - National savings include:
Answer: Household + business + government savings
Explanation: Total savings of the economy. - Opportunity cost means:
Answer: Best alternative forgone
Explanation: Every choice sacrifices something.
💰 Short Paragraph:
Economics studies how individuals and nations make choices about resource use, production, markets, efficiency, and distribution.
- Microeconomics studies:
Answer: Individuals and firms
Explanation: Focuses on small units of economy. - Macroeconomics studies:
Answer: Entire economy
Explanation: Includes inflation, GDP, unemployment. - Demand increases when:
Answer: Price falls
Explanation: Consumers buy more at lower prices. - Supply increases when:
Answer: Price rises
Explanation: Firms produce more for profit. - A market with one seller is:
Answer: Monopoly
Explanation: Controls price and supply. - A market with few sellers is:
Answer: Oligopoly
Explanation: Firms influence each other’s actions. - GDP stands for:
Answer: Gross Domestic Product
Explanation: Measures total output. - Inflation means:
Answer: Rise in general prices
Explanation: Reduces purchasing power. - Money’s main function is:
Answer: Medium of exchange
Explanation: Used to buy goods/services. - Which tax increases with income?
Answer: Progressive tax
Explanation: Higher earners pay more. - Opportunity cost is:
Answer: Best alternative forgone
Explanation: Every choice has a trade-off. - Factors of production include:
Answer: Land, labor, capital
Explanation: Used to produce goods. - Human capital is:
Answer: Skills of workers
Explanation: Training improves productivity. - Which economy has government control?
Answer: Planned economy
Explanation: Govt decides production. - Which economy has private control?
Answer: Market economy
Explanation: Based on supply/demand. - Balance of trade is:
Answer: Exports – imports
Explanation: Shows trade surplus or deficit. - Substitute goods example:
Answer: Tea and coffee
Explanation: Consumers switch between them. - Complementary goods example:
Answer: Car and petrol
Explanation: Used together. - Recession means:
Answer: Decline in economic activity
Explanation: GDP falls for two quarters. - Wants are:
Answer: Desires
Explanation: Not essential but preferred.
💰 Short Paragraph:
Economics focuses on markets, production, consumption, pricing, growth, scarcity, and efficient allocation of resources.
- Which market has differentiated products?
Answer: Monopolistic competition
Explanation: Many firms sell similar but slightly different goods. - Marginal cost means:
Answer: Cost of producing one more unit
Explanation: Used in production decisions. - A fixed cost example is:
Answer: Rent
Explanation: Does not change with output. - Which is a developing economy?
Answer: Pakistan
Explanation: Has growing but still developing sectors. - Which is a capital resource?
Answer: Machinery
Explanation: Used to produce goods. - The central bank of Pakistan is:
Answer: State Bank of Pakistan
Explanation: Controls monetary policy. - Which curve shows combinations of two goods?
Answer: Production possibility curve
Explanation: Shows trade-offs and efficiency. - When price rises, demand:
Answer: Falls
Explanation: Inverse relationship. - GDP per capita means:
Answer: GDP divided by population
Explanation: Shows income per person. - Commercial banks provide:
Answer: Loans
Explanation: They offer credit to individuals and businesses. - Imports mean:
Answer: Buying goods from other countries
Explanation: Goods flow into the country. - Exports mean:
Answer: Selling goods to other countries
Explanation: Outflow of goods. - Who is called the father of economics?
Answer: Adam Smith
Explanation: Wrote “Wealth of Nations”. - Which tax is same for everyone?
Answer: Proportional tax
Explanation: Same percentage for all incomes. - Which market type has no control over price?
Answer: Perfect competition
Explanation: Prices set by market forces. - Subsidy is:
Answer: Government financial support
Explanation: Lowers production cost. - Inflation reduces:
Answer: Purchasing power
Explanation: Money buys fewer goods. - Depreciation means:
Answer: Fall in value of assets
Explanation: Due to wear and tear. - Foreign exchange is:
Answer: International currencies
Explanation: Used for global trade. - Opportunity cost is related to:
Answer: Choice
Explanation: Every choice sacrifices an alternative.
💰 Short Paragraph:
Economics deals with scarcity, choices, production, consumption, and how individuals and nations allocate limited resources.
- Which curve shows consumer satisfaction?
Answer: Indifference curve
Explanation: Shows equal satisfaction combinations. - The total value of goods produced in a country is:
Answer: GDP
Explanation: Standard measure of economic performance. - Which market has many buyers and sellers?
Answer: Perfect competition
Explanation: No single party controls price. - Money used for future purchases is:
Answer: Store of value
Explanation: One function of money. - The price at equilibrium is determined by:
Answer: Supply and demand
Explanation: Intersection sets market price. - The unemployment caused by recession is:
Answer: Cyclical unemployment
Explanation: Due to low economic activity. - Which cost varies with output?
Answer: Variable cost
Explanation: Increases as production rises. - Central banks use:
Answer: Monetary policy
Explanation: Controls inflation and money supply. - Which tax is same amount for all?
Answer: Regressive tax
Explanation: Lower-income groups pay higher burden. - Elastic demand means:
Answer: Demand changes more than price
Explanation: High sensitivity to price. - Which economic system mixes public & private sectors?
Answer: Mixed economy
Explanation: Both government and individuals participate. - The total money people wish to hold is:
Answer: Money demand
Explanation: Affects interest rates. - Trade between nations is called:
Answer: International trade
Explanation: Exchange of goods and services. - Saving is:
Answer: Income not spent
Explanation: Used for future needs. - Inflation measured by:
Answer: CPI
Explanation: Tracks price changes of consumer goods. - Cost of borrowing money is:
Answer: Interest
Explanation: Charged on loans. - Which good increases in demand when income increases?
Answer: Normal goods
Explanation: Higher quality goods preferred. - Surplus occurs when:
Answer: Supply > demand
Explanation: Extra goods in market. - Which graph shows production efficiency?
Answer: PPC
Explanation: Shows maximum possible output. - A worker’s skill improves:
Answer: Human capital
Explanation: Training increases productivity.
Short Paragraph – Economics
Economics studies production, distribution, consumption of goods and services, and how individuals and nations make financial decisions.
- Demand increases when:
Answer: Price decreases
Explanation: Lower prices increase consumer buying. - Goods used to make other goods are:
Answer: Capital goods
Explanation: Machines and tools aid production. - The study of whole economy is:
Answer: Macroeconomics
Explanation: It examines inflation, GDP, unemployment. - Opportunity cost means:
Answer: Next best alternative
Explanation: Choosing one option sacrifices another. - When supply exceeds demand:
Answer: Prices fall
Explanation: Surplus pushes prices down. - GDP stands for:
Answer: Gross Domestic Product
Explanation: It measures total output of a country. - Which market has many sellers and buyers?
Answer: Perfect competition
Explanation: No seller controls price. - Inflation is:
Answer: Rise in general prices
Explanation: Money loses purchasing power. - Who wrote “Wealth of Nations”?
Answer: Adam Smith
Explanation: He is known as the father of economics. - Tax paid on income is:
Answer: Direct tax
Explanation: Paid directly to the government. - A good with negative effect on society is:
Answer: Demerit good
Explanation: Examples include drugs and cigarettes. - When exports exceed imports:
Answer: Trade surplus
Explanation: Country earns more foreign exchange. - Budget deficit occurs when:
Answer: Expenditure > revenue
Explanation: Government spends more than it earns. - The reward for labor is:
Answer: Wage
Explanation: Wages compensate workers. - Which is a renewable resource?
Answer: Water
Explanation: Natural cycles replenish it. - Subsidy means:
Answer: Government financial support
Explanation: Reduces price for consumers. - Law of supply states:
Answer: Supply increases with price
Explanation: Sellers offer more at higher prices. - A monopoly has:
Answer: One seller
Explanation: Single firm controls the market. - Unemployment means:
Answer: People willing to work but no jobs
Explanation: Measures economic health. - The central bank of Pakistan is:
Answer: State Bank of Pakistan
Explanation: It regulates monetary policy.
💰 Short Paragraph – Economics
Economics studies resource allocation, production, consumption, and the financial decisions of individuals and nations.
- Goods that satisfy wants directly are:
Answer: Consumer goods
Explanation: Used for consumption rather than production. - GDP per capita measures:
Answer: Average income per person
Explanation: Total GDP divided by population. - Microeconomics studies:
Answer: Individual markets
Explanation: Focuses on firms and consumers. - Macroeconomics studies:
Answer: Whole economy
Explanation: Includes GDP, inflation, employment. - Law of demand states:
Answer: Price and quantity demanded are inversely related
Explanation: Lower prices increase demand. - A monopoly is:
Answer: Market with one seller
Explanation: Seller controls price and supply. - Opportunity cost is:
Answer: Value of next best alternative
Explanation: Every choice sacrifices something. - Inflation reduces:
Answer: Purchasing power
Explanation: Money buys fewer goods. - A market with few sellers is:
Answer: Oligopoly
Explanation: Firms influence each other’s prices. - Money serves as:
Answer: Medium of exchange
Explanation: Facilitates trade. - Substitute goods example:
Answer: Tea and coffee
Explanation: Can replace each other in consumption. - Complementary goods example:
Answer: Car and petrol
Explanation: Used together. - A budget deficit occurs when:
Answer: Expenditure > revenue
Explanation: Government spends more than it earns. - Human capital refers to:
Answer: Skills and knowledge of workers
Explanation: Increases productivity. - Trade surplus occurs when:
Answer: Exports > imports
Explanation: Country earns more from trade. - Progressive tax means:
Answer: Higher income pays higher tax
Explanation: Tax percentage rises with income. - Recession occurs when:
Answer: Economic activity declines
Explanation: GDP falls for at least two consecutive quarters. - Capital goods are:
Answer: Used to produce other goods
Explanation: Machinery, tools, factories. - Savings are:
Answer: Income not spent
Explanation: Set aside for future use.
Short Paragraph:
Economics studies how individuals, businesses, and nations allocate scarce resources to satisfy unlimited wants through production, distribution, and consumption.
Goods used to produce other goods are:
Answer: Capital goods
Explanation: Tools, machines, equipment.The reward for labor is:
Answer: Wages
Explanation: Payment for work done.The curve showing income distribution is:
Answer: Lorenz curve
Explanation: Represents inequality.A market where buyers and sellers freely trade is:
Answer: Free market
Explanation: No government interference.Profit is the reward for:
Answer: Entrepreneurship
Explanation: Taking risk in production.Increase in general price level is:
Answer: Inflation
Explanation: Reduces purchasing power.A tax that is same for all is:
Answer: Proportional tax
Explanation: Same rate regardless of income.A fall in overall economic activity is:
Answer: Recession
Explanation: Decline in production and jobs.Borrowing by government from public is:
Answer: Public debt
Explanation: Loans to cover expenses.Total value of goods produced in a year is:
Answer: GDP
Explanation: Measures economic output.Excess supply leads to:
Answer: Price fall
Explanation: Sellers reduce price.Money stored in banks is called:
Answer: Savings
Explanation: Income not spent.A market with identical products is:
Answer: Perfect competition
Explanation: Many sellers, same goods.When demand exceeds supply, prices:
Answer: Rise
Explanation: High competition among buyers.The monetary authority of a country is:
Answer: Central bank
Explanation: Controls money supply.Machinery is an example of:
Answer: Capital
Explanation: Used in production.Cost that does not change with output is:
Answer: Fixed cost
Explanation: Rent, salaries, etc.Exchange of goods without money is:
Answer: Barter system
Explanation: Direct trading.Decrease in price of one good increasing demand of another indicates:
Answer: Complementary goods
Explanation: Example: tea & sugar.Importing more than exporting causes:
Answer: Trade deficit
Explanation: Negative balance of trade.
Economics One Liner MCQs cover key ideas like demand, supply, and scarcity. Perfect for mastering core concepts and boosting exam preparation.
Conclusion
Mastering these Economics One Liner MCQs gives learners a strong foundation for understanding global and local economic systems. Furthermore, this set prepares students for high-level exams like CSS, PMS, and PPSC. Keep practicing and move to the next sections to explore advanced areas like market structures, international trade, and fiscal policy.
FAQs
Q1: What are Economics One Liner MCQs?
A: They are short, fact-based questions that help students quickly revise key economic terms and theories.
Q2: Are these MCQs useful for competitive exams?
A: Yes, they are ideal for exams like CSS, PMS, NTS, and university-level economics tests.
Q3: How should I prepare for economics using MCQs?
A: Revise 20–30 MCQs daily, note difficult concepts, and revisit them regularly for better retention